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June 2004, Vol. 127, No. 6

Précis

Effects of new work practices on workers
Actual and preferred working hours

Précis from past issues

Effects of new work practices on workers

The notion that increased worker involvement in workplace decisions improves both the organization’s performance and the lives of its employees has been around for some time. More particularly, these "new work practices"—including quality circles, self-directed teams, and the application of total quality management (TQM) principles—have gained prominence in the United States since the recessions of the early 1980s and the concurrent increase in competition from Japan.

Since then, the subject has been studied extensively. Most recently, the editors of Industrial Relations devoted their January 2004 issue to the effects of new work practices on employees. Their introduction surveys the recent literature on worker involvement and its effect on wages. The results vary considerably, but in general, "the effect is a small increase in wages after companies introduce new work systems with higher employee involvement." The January 2004 Industrial Relations also includes nine articles dealing with the effects of various worker-involvement programs on such outcomes as wages, worker satisfaction, and workplace safety and health. Two of the articles are summarized below.

In an article entitled, "How Workers Fare When Employers Innovate," Sandra E. Black and coauthors found "evidence that employers do appear to compensate at least some of their workers for engaging in high-performance workplace practices." In addition, however, they also found "a significant association between [such] practices and increased wage inequality." Finally, when these authors looked at "the relationship between organizational structure and employment changes," they found that certain new programs—self-managed teams, for example—led to reduced employment, while other programs—such as increased worker rotation—were associated with fewer employment reductions.

Mark D. Brenner and others examined the relationship between "flexible" work practices and occupational safety and health and found some rather disturbing results: "a positive, statistically significant, and quantitatively sizable relationship between cumulative trauma disorders and the use of quality circles and just-in-time production." The case-study literature provides some possible explanations for the trend, including "reduced cycle times, speedups, ill-fitting parts, increased worker responsibility, and reduced worker empowerment." The authors caution that the link is not completely clear, and that further research is needed to gain better understanding of their findings.

Actual and preferred working hours

How free are workers to choose the number of hours they work each week? Traditional labor market theory holds that labor supply is flexible and that workers choose to work as many or as few hours as they prefer. In the March 2004 issue of British Journal of Industrial Relations, René Böheim and Mark P. Taylor argue that workers actually are fairly constrained in their working hours; many would prefer to work a different number of hours per week than they actually do. Moreover, workers often must change employers—or at least change jobs with the same employer—to move closer to their preferred number of hours. The authors conclude that such labor market rigidities hinder the welfare of workers.

The hours that individuals work each week affects employee job satisfaction, motivation, and retention. Working hours are determined by a combination of employer and employee preferences, technological factors, labor relations, and the business cycle. As a result, some workers may need to change jobs or employers to attain their preferred number of hours, or what Böheim and Taylor call their "desired level of labour supply." Changing jobs is costly, however, and workers cannot always find jobs with the number of hours they want to work—whether the new job is with a different or the same employer.

Böheim and Taylor analyze data from the British Household Panel Survey (BHPS), an annual survey of 5,500 British households that tracks respondents over time. Respondents were asked if they would prefer to work the same, fewer, or more hours per week than they currently work, assuming their hourly rate would remain the same regardless of their hours. The authors define those who prefer to work more hours as "under-employed," and those who prefer to work fewer hours as "over-employed." Those working the number of hours they prefer are considered "unconstrained in their labour supply." The data show that among full-time workers, nearly 37 percent of men and 41 percent of women would prefer to work fewer hours at their current wage rate than they were working at the time of the survey. Much smaller proportions of men and women—7 and 4 percent, respectively—would prefer to work more hours.

The data also show that the underemployed are more likely to increase their hours over time—usually by changing jobs—while the overemployed are less likely to do so. Conversely, the overemployed are more likely (the underemployed less likely) to reduce their hours over time. Finally, the data indicate that underemployed workers show greater job mobility—both within and between employers—and that all workers have some ability to change the numbers of hours they work each week in alignment with their preferences. It’s more difficult for overemployed workers—especially women—to reduce their hours, and sometimes they must leave the labor force to accomplish their goal. Still, the evidence suggests that workers can, over time, adjust their hours, although they may have to change jobs to do so, which is costly to both the employee and the employer.